New York VC Slim Pickings
October 22nd
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My company, Kloudshare, is engaging in discussions with venture capital firms regarding a potential fund raising round. As many of you know, my philosophy about venture capital is to not pursue it but to sort of let it come to you. I believe you can spend an enormous amount of time raising money and never succeed if you don't have the right story, plan, and product. By spending time focused on raising money you are not spending time adding real value to your business. And so it is critical to structure yourself in such a way that you can get to market without raising either any money, or without raising money outside friends and family.
And so my philosophy is to raise money by not raising money. I believe the best way to build value is by doing good work, and letting people find out about it.
The point of this preamble is that at Kloudshare we have not directly solicited any investors at all. My view is it is too much work, and will likely not be fruitful. And so the way it has worked is that people hear little bits and pieces about what we are up to and tend to ask questions, or get intoduced to us through other people and then inquire etc.
This process for us has lead to an interesting insight that might not be possible if we had attempted to directly target VC funds. Because we only engaged in conversations with people that initially expressed interest in us, we have been able to organically gauge the types of funds that would be most naturally interested in a company like ours.
The upshot of this process is that we are engaged in discussions with about six venture funds, all of them "a-list" and *none* of them are in our home town of New York. To be clear, the conversations are in various stages, and I am not here to suggest anything is at all imminent. But the fact that there are no conversations at any stage with any New York funds is, to me, surpising, even though it probably shouldn't be.
The point of this is not to bash New York VC funds who are obviously engaged in what they believe to be their own economic self interest. But it is to suggest that if you are an early stage tech company, while New York may very well be the right place for your business, it may not be the right place to raise money. If you are in New York, and you are going to at some point want to raise money, you should be agressively building an out of state network. Otherwise the early stage fund raising odds are radically stacked against you.
And so my philosophy is to raise money by not raising money. I believe the best way to build value is by doing good work, and letting people find out about it.
The point of this preamble is that at Kloudshare we have not directly solicited any investors at all. My view is it is too much work, and will likely not be fruitful. And so the way it has worked is that people hear little bits and pieces about what we are up to and tend to ask questions, or get intoduced to us through other people and then inquire etc.
This process for us has lead to an interesting insight that might not be possible if we had attempted to directly target VC funds. Because we only engaged in conversations with people that initially expressed interest in us, we have been able to organically gauge the types of funds that would be most naturally interested in a company like ours.
The upshot of this process is that we are engaged in discussions with about six venture funds, all of them "a-list" and *none* of them are in our home town of New York. To be clear, the conversations are in various stages, and I am not here to suggest anything is at all imminent. But the fact that there are no conversations at any stage with any New York funds is, to me, surpising, even though it probably shouldn't be.
The point of this is not to bash New York VC funds who are obviously engaged in what they believe to be their own economic self interest. But it is to suggest that if you are an early stage tech company, while New York may very well be the right place for your business, it may not be the right place to raise money. If you are in New York, and you are going to at some point want to raise money, you should be agressively building an out of state network. Otherwise the early stage fund raising odds are radically stacked against you.
